Massively is reporting that WoW is caught in the battle between the Ministry of Culture and the General Administration of Press and Publication over who gets to regulate online games — and has been denied permission to operate (again).

The Ministry of Culture was, I believe, the arm of the government there that recently banned gold farming, but also the one that last gave WoW permission to operate there.

Thanks to the astonishing growth of games on social networks such as Facebook and MySpace, the U.S. virtual goods market is poised to clear $1 billion in revenues in 2009, up more than 50 percent from a year earlier, according to a new report.By 2010, revenues could hit $1.6 billion as users become more comfortable paying for virtual goods in small transactions that are executed in a seamless fashion.

These days, it’s more likely that the money flows in the other direction, but it’s interesting to see nonetheless:

Over the weekend the government run General Administration of Press and Publication (GAPP) and National Copyright Administration issued regulations designed to limit the influence foreign companies have in that region. US companies that wish to operate in China will need to license their content rather then enter into a joint venture.

Several days ago, Shanda published some screen captures which the players sadly found to include class restrictions and commercial stores … the RMB will dominate everything … if a player has cash, he can purchase equipment to upgrade without having to go through the trouble to combat monsters …

The players decided to call for a boycott. They established Baidu forums and QQ groups to protest the “false advertising” by Shanda to “take advantage of their feelings.” Some of the leaders even called for the players to block the entrances to the various cities at 2pm, August 28 when the game officially opened.

At one entrance, more than 40 characters stood still. They wore cloth dresses and cloth shoes and stood shoulder to shoulder. Other players cannot enter. Two hours later, more than 2,000 people entered the chat room. Meanwhile, several thousand people were blocking the gates of the various cities in the game.

The link is a screenshot-heavy post detailing the story of what happened when the game Hot-Blooded Legend was revived as an RMT-heavy title called The Legend Returns. It was met with protests… the page has two different accounts of the event, here’s a snippet from the other:

The reason why this mass incident occurred was that the new version of Legend was over-commercialized and quite inconsistent with their advertising claim that the “original flavor” would be preserved. In previous versions of the game, victories and social rank depend on persistence. As long as the player is “hardworking” and is brave and strong in combating monsters, he can get promoted in rank and obtain more equipment. In fact, he can proceed to have “romance” and even “marriage” in a life of leisure.

During the early days of UO, when PKing was rampant, we notice a major issue in servers hosted along the Pacific Rim — much higher rates of PKing, harassment complaints, etc. We dig in, and it turns out that we were seeing lots of warfare and animosity between players from Asia and players from the US.

Hong Kong servers suffered for a while from triad gang wars being imported into UO. Guilds would form that matched the gangs, and the streets of Britain would run with simulated real-life blood.

Years later, I visit China, and I am surprised that anyone even knows who I am, since China never officially got a UO release. I was told that UO servers running either pirated servers or gray shard servers probably hit as many as 400,000 players across China.

The article I have read on this doesn’t offer a lot of details, but I think there is a fair amount of potential for this project.